Yup Oval and good discussion. And that's exactly what it will come down to. This is mirrored in 26USC 3121 section b (4) as well as several other publications (there are other amplifications to this and guidance pamphlets from the IRS as well).
https://www.law.cornell.edu/uscode/text/26/3121
Like I said tax law is a huge quagmire so I'm understandably leery about those who seem more well educated but advocate something that doesn't sound right.
Does the intent of the rule mean that income sourced for operations/personnel in the US be taxed and subjected to FICA (as well as the other disability requirements), or that ALL income can be excluded (meaning FICA and coverage) simply by it being a foreign aircraft with US nationals operating it (albeit one that touches and flies between US ports from time to time--but mostly flies internationally) ?
Perhaps I expressed myself badly by using the term 'opt in.' What I meant was that for the purposes of SDI and FICA one can either claim they are completely excluded from it (as has been just done), or they can acknowledge they are essentially operating within the US with US nationals employed at bases there and pay the FICA (at least for the portion that is sourced to within the US).
So here is the situation. You have a foreign corporation with a US base(s) (and a license for its entity at a physical location in San Fran to do so which is where the US nationals are employed--albeit d/b/a as a foreign corporation) employing US nationals/PRAs living there (some of whom are CA residents) and paying them in US dollars to US banks. Some of its aircraft operate within the CONUS point to point (most don't and operate internationally), some of its employees are paid for duties which originate and terminate solely between points within the US (as well as while sitting on the ground in the US). Every other US statue applies to them regarding work conditions at the US bases--as well as many as they operate internationally. If one of them is injured (or indigent) they will (as US nationals/PRAs) be applying for disability and/or relief in their home nation (the US) and state (state of basing at least).
Not to mention that (as US nationals) they are paying full US taxes on all income derived there (with a credit toward that paid to HKG for the fraction of days spent in HKG).
How would you like to argue the case that they are somehow exempt ?
Perhaps I am missing something but I wouldn't like to make that case. AND (in the US) when you find one law that tells you can do something screwy (especially with the government and its money), there's often another one that you missed that tells you that you can't.
It also invites scrutiny as to why exactly IS the entity a d/b/a rather than a 'normal' American satellite branch of a company. Perhaps there are excellent reasons for this. Eventually the duck winds up quacking so there isn't alot of shield for a foreign corporation in the US compared to a locally established entity--at least in terms of the reach of the law of the land and practical implications.
So as I said I'd probably have left just well enough alone. But I guess we'll see.
And, like I said, the F/As really need to get organized as well as get some competent legal advice about their situation. I'd sign nothing in the mean time.
Despite the cynicism here I do believe that if it comes to pass that bona-fide tax overpayments were made the F/As would get their money back (as well as would the company)--but in so doing might lose any SS credits in the process. But this issue is way over the heads of ordinary working stiffs like us and rather than a "we're going to do this so sign here" type of approach they need an entity to assist them that really knows what it's doing.
Last edited by Shep69; 26th Oct 2016 at 19:38.